News

Palo Alto moves ahead with citywide fiber plan

City Council approves 'master plans' for Fiber to the Premise, wireless network

The good news for Palo Alto's technophiles is that if all goes as planned, construction of a long-sought, citywide ultra-high-speed Internet network could begin by the end of next year.

The bad news is that so far, in the city's frustrating slog toward what is known as "Fiber to the Premise," almost nothing has gone as planned.

The years of setbacks haven't stymied the City Council, which on Monday agreed to commission a master plan for expanding the city's 41-mile "dark fiber" ring to all parts of Palo Alto, giving residents and businesses Internet speed of more than 100 megabits per second. The council also directed staff to pursue a complementary master plan for a citywide wireless system that would improve public-safety communications, create new smart-grid applications and provide the public with WiFi Internet access.

Both plans were approved by a 7-0 vote, with Karen Holman and Gail Price absent.

The council approved the plans with much enthusiasm and little discussion, following the recommendation of its newly created Technology and the Connected City Committee. Members of the committee have been exploring other cities with fiber networks over the past year and are hopeful that Palo Alto can soon join the small but growing club that now includes Kansas City, Mo., Chattannooga, Tenn., and Austin.

Councilwoman Liz Kniss, who chairs the committee and who attended a recent conference on fiber in Kansas City, called the effort "exciting stuff," but warned of the "pitfalls" that could pop up along the way. Some cities, for example, had to withstand lawsuits from incumbent Internet providers before they could get their systems up and running. Others, including Kansas City and Austin, are relying on Google to build their Internet systems.

"As enthusiastic as a lot of them are, there's usually a secret sauce that a lot of them have," Kniss said.

The city is already well familiar with pitfalls. After talking about a citywide fiber system for nearly a decade, Palo Alto signed on with a private consortium in 2008 to actually build and operate one. That deal died in 2009 when the consortium's financing collapsed and the companies demanded a greater financial contribution from the city. The council refused, effectively killing the deal.

The city had also applied for federal grants and for Google's coveted citywide fiber program (which Kansas City ultimately landed). It failed in both endeavors.

Last year, the fiber dream suffered another setback when a pair of reports commissioned by the Utilities Department confirmed that a fiber system would require ongoing subsidies from the city. Most people, the consultants found, just aren't willing to pay for ultra-high-speed Internet.

"A measurable number of homeowners are interested in adding telecom to the list of services they can purchase from CPAU, but a commitment to invest in a fiber connection is very limited."

The council's commitment, however, faces no such limitations. Earlier this year, the council unanimously adopted "technology and the connected city" as one of its three annual priorities, with a citywide fiber system at the top of the agenda. Last month, a committee charged with exploring this idea approve a staff request to commission a new master plan, which would cost between $100,000 and $350,000 (depending on how much environmental review will need to be conducted). The funds will come out of the city's dark-fiber reserve, which collects fees from commercial users of the network and which had a balance of $15.3 million as of last summer.

Utilities officials also believe a proposed fiber network would attract interest from third-party providers, who would potentially build the system.

"Given the upturn in the economy, the City believes that there is renewed interest from telecommunications service providers in building an advanced competitive broadband network in Palo Alto," a new report from the Utilities Department states.

The brightening financial picture, a well as the growing number of cities adopting fiber networks, has given the council fresh reasons for optimism. Councilman Larry Klein said Monday he was "delighted" to support the latest proposal and stressed the need to educate the public about the difference between fiber and WiFi.

"The bigger point is that this is where the world is going and if we want to continue to be the leader in innovation, we need to be there as well," Klein said. "I'm very excited to see us move forward."

The wireless plan, meanwhile, would proceed on a parallel wavelength. It would cost up to $100,000 to create and would take between six and nine months to complete.

Staff estimates that it would cost between $3 million to $5 million to build a citywide wireless network. The wireless network could benefit significantly from a fiber system, which would support "backhaul" transmission links to allow high-speed Internet.

"With appropriate design and sufficient budget, municipal networks can support remote and mobile broadband needs for public safety personnel and other field-based staff, in addition to potentially offering WiFi Internet access for the general public," a recent city report states. "Furthermore, specialized uses such as a wireless communications system for smart grid applications can also be accommodated by a multifunctional wireless network with the proper design and technology."

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Posted by Jared Bernstein
a resident of Professorville
on Oct 30, 2013 at 10:44 am

Great news. Let's get this going right this time. Thank you, City of Palo Alto!

Posted by Charles
a resident of Community Center
on Oct 30, 2013 at 11:08 am

The fact that the fiber network in Palo Alto is paid for by user fees, not taxpayer funds, is welcome news to me. Improving infrastructure with user fees is practically unheard of in any city. I happy to learn Palo Alto is doing this. With $15.3 million in the fiber bank, it seems like quite a bit could be done, hopefully sooner rather than later.

To maintain its reputation as Silicon Valley's leader in innovation, the best minds in Palo Alto need to come up with something awesome and financially attractive for all of us. Being paid for with user funds is a great start.

A very positive environmental step could be taken by linking everything to fiber...electric, gas, and water services (all Palo Alto-owned utilities) so we could make informed real-time changes in our usage of precious resources and, as a happy bonus, maybe gain access to 21st century high-speed and reliable fiber communications services. Chattanooga may be doing something like this.

Cedar Fals Iowa has figured out how to do fiber with their municipally owned utilities company. One key was that they did not have an entrenched cable company putting the squash on everything. That is not the case in Palo Alto. Comcast will kill this faster than greased lighting. Palo Alto will be the study case in how to guarantee a monopoly. They will spend millions killing fiber.

Thank you Mayor Scharff for advocating fiber at your state of the city speech, and thanks to the City Council for the 7-0 vote!

Comcast has for me provided decent internet service, but it's expensive and slow at least compared to fiber. Also, their cable TV DVR and set-top box quality as well as channel packaging are awful. It would be sweet to escape them to whatever extent possible.

Posted by former resident
a resident of another community
on Oct 30, 2013 at 12:19 pm

This has been going on for way more than a decade, to be sure! My late husband was involved in these efforts way back in the 90s. It's mind-blowing and embarrassing that the city at the heart of Silicon Valley, home of Stanford Univ., has been so extremely slow to get on board with this.

Posted by Scholar
a resident of Menlo Park
on Oct 30, 2013 at 12:51 pm

Isn't this more about self-image than practicality. Sure the "City" (the government and its departments) would love to spend the money it has in the reserve. Palo Alto is not a particularly innovative city and is not the center of Silicon Valley.

DOCSIS 3.1 technology provides significant new value for cable operators and consumers of broadband services including:
• Speed: Defines support for up to 10 Gbps downstream and up to 1 Gbps upstream network capabilities.
• Quality of Experience: Utilizes Active Queue Management to significantly reduce network delay as data traffic grows in the home network, dramatically improving responsiveness for applications such as online gaming.
• Higher Capacity: Enables a significant increase in network capacity with the ability to transmit up to 50 percent more data over the same spectrum, on existing HFC networks.
• Energy Efficiency: Enhancements to the DOCSIS protocols will increase cable modem energy efficiency.
• Flexible Migration Strategy: DOCSIS 3.1 modems are designed to co-exist with older versions enabling incremental deployment based on market demand.
---

With AT&T now offering 1Gb service to Austin, it's difficult to understand how anyone can believe that Comcast and AT&T are not capable of delivering more than sufficient service to Palo Alto.

This is a disaster in the making. The fact that the Utility has made it abundantly clear that they have no obligation to keep the electric power up and running, it's unbelievable that people would want the City involved in their businesses, and Internet connectivity, more than it currently is.

Sadly, Mayor Scharff will be out-of-office when the depth of this disaster becomes known. Scharff is simply grandstanding, and has shown no idea how, or what, Information Technology is. There is no demand for this, other than by a few people who expect that somehow other people will subsidize their broadband service.

Posted by Malcolm
a resident of College Terrace
on Oct 30, 2013 at 1:13 pm

Sonic has already installed gigabit fiber to the residences at Stanford, and they are doing it on their own in Sebastapol. What would it take to convince somebody like Sonic to do gigabit here? Does the city have to pay, or just reduce the red tape?

As I understand it from an AT&T tech, all of College Terrace is served from lines that terminate at the downtown office, really far away, because HP wanted their Centrex service provided by an office that was manned 24x7. HP has certainly moved onto better technology (perhaps the PA fiber) but CT is stuck with the really old lines and bad Internet service. So we would welcome fiber!!!

Posted by Karl J
a resident of Walter Hays School
on Oct 30, 2013 at 1:23 pm

The US is last in terms of price/performance for residential internet connection in the developed world. See:Web Link
I would love to have Palo Alto Utilities provide a true high speed communications to my residence.

Posted by curmudgeon
a resident of Downtown North
on Oct 30, 2013 at 2:52 pm

From Karl J's link:

"We [the US] deregulated high-speed internet access 10 years ago and since then we've seen enormous consolidation and monopolies, so left to their own devices, companies that supply internet access will charge high prices, because they face neither competition nor oversight."

Strangely, the countries listed with the really high quality inexpensive service have heavy government involvement in their economies; some are borderline socialist. It seems our local techies have a point: to get the best internet service you gotta get the government involved.

Palo Alto's dark fiber network was originally financed with an intra-City loan of about $2 million, but that loan has long ago been paid back. Improvements to Palo Alto's electric, gas, and water infrastructures are paid for by the customers of these commodities. The goal of municipal FTTP in many communities is to have it paid for, in the long run, by the customers who use the services.

Chattanooga justified building its municipal FTTP network because it was necessary to implement smart grid; it then noticed that it could also provide Internet, TV, and phone services.

Posted by Dennis
a resident of Crescent Park
on Oct 30, 2013 at 4:21 pm

The Program That Will Not Die.

The cost to individual users was prohibitive to begin with as evidenced by last year's Utility Department's reports, and I don't see anything that changes this fact. Who will pay when the system is underfunded?

And now there seem to be two plans, cable and Wi-Fi, potentially competitive, neither with committed vendors, funds, or user base.

By the time this gets sorted out by the Palo Alto Process, I'll be too old to appreciate it.

AT&T is not "now" providing 1-Gbps Internet service in Austin. AT&T claims it will offer 300/300 Mbps Internet service to some parts of Austin starting some time next year, upgradable to 1-Gbps service eventually, at an unknown price. Google doesn't seem to be worried.

If you're concerned about the reliability of the city's municipal electric service, you should know that Chattanooga implemented a municipal FTTP network precisely because it was needed to implement smart grid. Its electric distribution system has fiber-controlled switches that can minimize the impact of electric failures, saving the utility and its customers millions of dollars a year.

Before everyone gets all excited about Fiber and running an internet service you should read: Web Link
This more or less outlines the history of the Cable Co-op of Palo Alto, our first internet service. The article is not quite the end of the road for the Cable co-op in 1996 but it accurately predicted the future. Sale, first to ATT and then Comcast as it was not financially profitable due mainly as I remember to the Palo Alto Process. Everyone wanted everything for free more or less. The 15 member board could never agree on anything in meetings that typically ran 5 hours or more. Back then they were charging $100 a month for internet and still could not make it work. We REALLY, REALLY don't want to go down this road again.

Posted by Anonymous
a resident of Another Palo Alto neighborhood
on Oct 30, 2013 at 7:17 pm

Unless some other entity other than the City of Palo Alto or it's utility builds this fiber network, it won't happen in the next decade either. As long as the Palo Alto Way is involved it will stall and bleed to death.

AT&T on Tuesday announced that it will deploy a 100 percent fiber Internet broadband service in Austin that will provide speeds of up to 1 gigabit per second. The company's U-verse with GigaPower will begin rolling out in December.

AT&T said U-verse with GigaPower will at first reach tens of thousands of customers in Austin, with an expansion planned for 2014.

Since we will have to wait a few months to see what AT&T does, it seems like they have a lot on the line if they don't deliver. Google, which is always in Beta mode, has yet to deliver much, other than to buy the Provo Municipal Fiber operation for $1.

I have no doubt that Google will eventually deliver. It's even possible that they could deliver here in Palo Alto.

> DOCSIS & Comcast

No, DOCSIS doesn't make Comcast "invincable", but it does make it obvious that they are ready to step up their service offerings to the state-of-the-art. Comcast also offers other services, which it is very, very, doubtful that the City of Palo Alto will ever be able to provide--such as home WiFi, and Home Surveillance Systems (via Xfinity)--

There is no way that the City of Palo Alto will be able to offer the so-called "triple play" that is sufficiently competitive to enough people to pay for the roughly $65M deployment. What's also doubtful is that the City has fully thought through the long-term operations of a Fiber system, which probably will need most of its hardware replaced every 7-9 years. This includes the batteries needed for the home electronics, if any kind of emergency-backup is to be provided when the grid fails.

No, DOCSIS 3.1 doesn't make Comcast "invincible"--but it does allow Comcast to offer 1Gbs service for those who want it.

Posted by Digital Palo Alto?
a resident of Downtown North
on Oct 30, 2013 at 9:29 pm

The $15.3M dollars the city council, city manager, and staff are salivating over is the result of the utilities department over charging rate payers for years, and having insufficient accounting skills, or worse, suddenly discover the 'extra' funds last year or the year before, and the city thinks they have found buried treasure. If the utilities department didn't over charge customers, the $15.3M would not excite.

The utilities dept concludes a year ago that few people will actually subscribe to the dark fiber service, and therefore, the system, if built, would need subsidies, more taxes or higher utility rates for everyone, so a few die hard internet users can have gigabit download speeds.

City staff jumps into the scene recommending yet another contracted study to cook up a plan for this thing which has been agonized and planned over for what, two decades already. I can't believe that there isn't a room somewhere in city hall stuffed with decades of reports, plans, estimates, etc. What exactly is this new study going to do, that hasn't been scrutinized before?

The fact that ATT, Xfinity, and Comcast all currently offer fast internet through out Palo Alto that's available right now for whom ever wants it, is completely lost on this dopey 'digital' city council, city manager, and nameless city staff.

The real problem here is that the city of Palo Alto has way more money than it needs. This stupid dark fiber fantasy just won't go away. The city is also struggling to find any justification to float a bond on the next ballot so they can have a boat load of cash, for something, they are just not sure what, but they are certain that they absolutely need more money to squander. Maybe the digital egg in down town needs a companion?

Posted by Jim Hols
a resident of Community Center
on Oct 31, 2013 at 10:18 am

The most pressing problems with Telecom in the USA is bundling and near monopoly. Notice how AT&T and Verizon charge almost identical prices for cellular service. And it is multiple times higher than Europe where there is competition.

In our area you can get Dish, DirecTV, Comcast, AT&T, and Sonic.
Dish and DirecTV are not capable of responsive Internet access so there is only the remaining big 2 and smaller Sonic.
Even if Comcast were to be able to make good on the promise of DOCSIS 3.1, what would be the unbundled price of that service?

We need more competition. And I agree with those recommending Sonic. I really think the City should look into working with them on improving high speed Internet in Palo Alto. Sonic has rolled out Fiber in Santa Rosa, Sebastopol, and San Francisco. They have fabulous customer ratings. Even their Yelp rating is 4 star. See Web Link
If Palo Alto does not work with a good partner like Sonic, then I fear this is all hot air. Over a decade has gone by since the Community Center Fiber experiment.

We need faster Internet now - not in 5 years. Also, one poster said we already have high speed Internet in Palo Alto. Kind of like a supercharged customized Amish buggy.

The cost assumptions on page 60 of staff's 06-06-12 report are just wrong, and that made the entire report wrong.Web Link
(If the report were right, FTTP would also be prohibitively expensive in Chattanooga and Kansas City and a lot of other places.)

I would prefer that the City implement FTTP before even thinking about implementing Wi-Fi. If you agree, please let Council know.

It's OK with me if the City decides to build out FTTP first in neighborhoods with sufficient customer sign-ups to assure financial success.

I hope that this time the city determines the COST for users to subscribe, and then polls everyone (not just a few) to see how many would pay. We don't need yet another failure, and there is no point in wasting time and money if it isn't realistic.

An easy straw poll would be to put a "ballot" in with each utility bill. that way every household could have a say.

I checked with the Marketing Manager for Cedar Falls Utilities. She said that when Cedar Falls had a referendum in 1994 proposing to implement a (HFC) telecom network, "the incumbent cable and phone providers fought it tooth and nail." But when the utility upgraded (to FTTP) in 2010, there was no public opposition from the competitors, because the utility had a track record.

The telecom incumbents fought Chattanooga. The telecom incumbents fought Lafayette. The point is that these municipalities won.

"In order for Waterloo with its businesses to move into the 21st
century, we need fiber optic capability…I believe it has hurt us economically not be able to provide fiber optics to businesses locating in our city."
---

Here in Palo Alto, we have a population of about 65K-66K, and a median household income of about $122K. The idea that a municipal fiber offering is going to increase the number of companies moving to Palo Alto, bringing in thousands of new workers doesn't seem likely, nor is it really desirable, as we are now sensing with the ABAG mandates.

It may have made sense for Cedar Falls to create a municipal fiber offering, although it would take a fairly in-depth review of their economy, the town's finances, and a review of their bond worthyness in order to get any sense of whether this municipal effort really paid off.

This posting also seems to reflect a general distaste for private sector telecommunications companies. It makes no sense for our City government to endorse the anti-business attitudes of a very small number of people.

Posted by wmartin46@yahoo.com
a resident of Fairmeadow
on Oct 31, 2013 at 2:44 pm

As to the wireless coverage of the City, the City has an opportunity to something unique, I submit. In the not-too-distant future (5-10 years) we are going to see the convergences of a number of vehicular-related technologies. For certain, we are going to be seeing self-driving cars on the road. Transportation and vehicular engineers have been talking about "intellegent roadways" for at least two decades. Within the near-term future, we will be seeing some of these technologies for sale, and deployed in various locations around the world.

At the moment, Vehicular Telematics has evolved to the point where a Next-Gen 911 has been developed, and is waiting for a champion (presumably DC) to begin funding some of the projects that will move this technology from "the wings" onto our roads. At some point, every town in the US will want to provide some access to this technology. So, the clock is ticking.

It's unlikely that any wireless installed today would actually work in ten years. But getting the organization in place, coming up with cost estimates, and determining how much public access could be allowed, are all issues that need to be considered.

The cost of providing a wireless "cloud" for Palo Alto might well be less than the cost of providing a "computer lab" for the Mitchell Park complex. Sadly, no one in the City was thinking these issues through when this massive behemouth was designed, and foisted on the public at the polls.

Additionally to Vehicular Telematics, we are also seeing a burst of innovation in the area of mobile communications, as well as personal mobile computing, all of which needs wireless to interface to the Internet.

Doing wireless, and forgetting residential FTTP would be a better long-term use of public money.

Cedar Falls Iowa is a college town with the University of Northern Iowa located in it. The University population of 30,000 is not counted by the census folks so in reality it is about the same size as Palo Alto. Cedar Falls is a part of a metropolitan area of over 100,000 when you count Waterloo. The folks in Cedar Falls seem to be smarter than the ones in Palo Alto in that they have managed to run their own Cable and high speed internet service for over 30 years, something Palo Alto failed miserably to do.

Posted by Wayne Martin
a resident of Fairmeadow
on Oct 31, 2013 at 4:42 pm

> Cedar Falls Iowa is a college town with the University of Northern
> Iowa located in it. The University population of 30,000 is not counted
> by the census folks so in reality it is about the same size as Palo Alto.

And what happens when you add in Stanford's student/resident-staff population?

Posted by Douglas Moran
a resident of Barron Park
on Oct 31, 2013 at 5:54 pmDouglas Moran is a registered user.

The Cedar Falls Iowa argument is an example of fallacious reasoning (exact term eludes me). It assumes that the cited similarities between Cedar Falls and Palo Alto are the crucial features/variables. However, given the large number of similarly sized university towns in the US, this begs get question of why there aren't many other such cities with FTTP.

Posted by anebg
a resident of Ventura
on Nov 1, 2013 at 12:22 amanebg is a registered user.

If the city of Chattanooga, TN did it though their utilities in an effort to improve their smart grid; whilst enabling the residential customers to have an affordable and reliable internet service, I don't see why Palo Alto can't do it. I would love to even have a chance to jump off Comcast, they just happen to have a monopoly in my neighborhood. They've increased the price on me 3 times in the past 3 months. I'm ready to jump ship on principle alone.

> About the DOCSIS 3.1. I say bring it on. Fiber will beat it(nothing beats speed of light), and competition will make the market more reasonable. There isn't any competition at the moment. You pretty much have cable speeds, or DSL speeds at the moment.

I'm all for the Sonic bandwagon, but I feel if the city gave preference to a certain ISP, they would make themselves an easy target for lawsuits and the like. Correct me if I'm wrong.

Posted by Wayne Martin
a resident of Fairmeadow
on Nov 1, 2013 at 8:08 am

> I'm all for the Sonic bandwagon, but I feel if the city gave preference
> to a certain ISP, they would make themselves an easy target for lawsuits
> and the like.

That's probably true. The City gave an exclusive franchise to Cable Co-op back in the 1980s, and ended up in a suit with another cable provider, which it lost. If memory serves, the suit was argued on first Amendment grounds, rather than something that might have seemed more obvious--such as restraint of trade.

Century first attempted to gain access by leasing space on Pacific's poles. This request was refused by Pacific because Century had not obtained a valid franchise from the city of Palo Alto to provide cable service. Rather than seeking a franchise for itself from Palo Alto, Century sued Palo Alto, claiming that the city's exclusive franchising arrangement with Century's competitor CCC violated Century's first amendment rights. Century won that lawsuit, see Century Federal, Inc. v. Palo Alto, 648 F.Supp. 1465 (N.D.Cal.1986) and therefore currently has the right to provide cable service to the people of Palo Alto. Century could thus now presumably enter into a lease with Pacific for pole space.

648 F.Supp. 1465 (1986)
CENTURY FEDERAL, INC., a California Corporation, Plaintiff,
v.
CITY OF PALO ALTO, CALIFORNIA, a Municipal corporation; City of Palo Alto Utilities, a Municipal utility; City of Menlo Park, California, a Municipal corporation; and City of Atherton, California, a Municipal corporation, Defendants.

LYNCH, District Judge.
This action involves an aspiring cable television operator's first amendment challenge to the defendant municipalities' use of an exclusive franchising arrangement to limit to one the number of cable operators granted access to those facilities necessary to install cables within the defendants' boundaries. Plaintiff now moves for an order granting partial summary judgment
on the issue of liability, asking this Court to hold as a matter of law that such a government-imposed restriction on the number of cable speakers is facially invalid under the first amendment. After considering oral argument and reviewing the extensive briefs and exhibits filed on both sides, this Court hereby grants plaintiff's motion for partial summary judgment. In doing so, the Court holds only the following: First, that under the undisputed facts of this case, the insignificant, if any, increase in disruption to the public domain resulting from the initial installation of more than one cable system, as opposed to a single system, does not constitute a substantial or important governmental interest so as to justify the suppression of all cable speakers except the one to which the municipalities grant permission to speak; and second, that because cable television is more closely analogous to newspapers than the broadcast media, the fact that the cable television market in a proposed service area is a natural monopoly does not justify greater governmental regulation of cable operators than would otherwise be allowed under the first amendment.1
----

This particular set of legal problems revolved around the City's misguided belief that it could control the access to people's homes by commercial service providers. The Court sent the City a clear message that it could not.

Sadly, this was a long time ago, and most people probably are unaware of the City's attempts to control the business of telecommunications in this town.

Posted by Kate
a resident of Duveneck/St. Francis
on Nov 2, 2013 at 11:02 am

How can the city fix THIS if it can't get the streets fixed? Drive down Forest Avenue? DON'T !! Drive downtown PA's side streets? ferheavensake DON'T. Stay away from High Street and some side streets between Lytton and Everett. Fix the traffic mess at PALY, T&C, and El Camino? City employees don't probably have to deal with that - so don't bother. But city-wide fiber is glamorous, looks good on resumes' , on
'qualifications' for going up the political ladder! - or wherever there is an more impressive opening, The leaf season is here, and street sweeping is now 2X a month. We received the highest utility bill EVER this month - the highest ever in years and years. And in the opinion of many residents, the Utility Fund is a 'cash cow' which regularly gets 'milked' for the general fund. Years ago that didn't happen. And now the city wants to remodel city hall. Get a tent!! I can't wait until the next election.

Posted by Kate
a resident of Duveneck/St. Francis
on Nov 2, 2013 at 11:02 am

How can the city fix THIS if it can't get the streets fixed? Drive down Forest Avenue? DON'T !! Drive downtown PA's side streets? ferheavensake DON'T. Stay away from High Street and some side streets between Lytton and Everett. Fix the traffic mess at PALY, T&C, and El Camino? City employees don't probably have to deal with that - so don't bother. But city-wide fiber is glamorous, looks good on resumes' , on
'qualifications' for going up the political ladder! - or wherever there is an more impressive opening, The leaf season is here, and street sweeping is now 2X a month. We received the highest utility bill EVER this month - the highest ever in years and years. And in the opinion of many residents, the Utility Fund is a 'cash cow' which regularly gets 'milked' for the general fund. Years ago that didn't happen. And now the city wants to remodel city hall. Get a tent!! I can't wait until the next election.

Posted by rsmithjr
a resident of Duveneck/St. Francis
on Nov 2, 2013 at 4:02 pm

We already have a number of vendors, large and small, involved in providing services. An increasing amount of web traffic also goes over cell lines, and our cell service is particularly poor here, largely because the city has not made any efforts to make things easier for cell providers.

An approach that I have recommended many times is cooperation with the service providers. Ask them what they would like to see and how they could provide better service. Work with them to increase quality and competition on a level playing field rather than trying to start their own business in what is now a very difficult business.

Instead, the city has been a continual problem for communications vendors. The city simply doesn't want to cooperate. Ask the cell phone providers such as AT&T. Palo Alto is on their list of difficult cities to be sure.

A bit of history follows.

I was on the board of the Cable Co-op for a number of years. One would have thought that the city would have wanted to cooperative with a subscriber-owned cooperative. No! The city was far and away the Co-op's worst enemy. They complained and undermined our business every chance that they got, took us to task publicly over things we could not control, and generally made life miserable even though we won many awards for being the best cable system in the Bay Area.

They imposed and then enforced onerous franchise terms. When the Co-op was being sold, they presented us with a large "back-bill" for franchise payments that was deemed unfair by the Co-op's accountants, but the Co-op felt that it had no choice but to pay in order to proceed with the sale. Just the price of doing business with the city.

All along, the impression I had was that the city wanted to own the communications business in town and resented the Co-op's modest success. The city stated many times its desire to be in this business and to control it. Several years before the Co-op's sale, they were talking about a fiber-based competitive system.

The Century-Federal lawsuit mentioned above was a clear example of the city's overreach to control cable. No one knows for sure how much that lawsuit cost the city, but the number we heard a number of times was $8M. The city amortized this out of the franchise fees paid by Co-op subscribers we heard.

According to Broadband Communities Magazine's interactive database, there are 126 municipal FTTP networks in North America.Web Link
A few span multiple cities. Not all are citywide. Not all serve residences. Not all are in university towns.

I don't make the assumption that towns with universities are more likely to have city governments that are early adopters of new technologies than towns without universities.

In this paper, Jim Baller argues that the "killer app" for community broadband is economic development.Web Link
You don't need to be a university town to be interested in economic development.

In towns like Palo Alto, which don't have a lot of unused space, economic development can mean enabling home businesses and allowing people to telecommute.

In 2010, there were 2008 publicly-owned electric utilities in the U.S., and another 877 co-ops.Web Link electricity has been around for more than a century, while FTTP networks have been around for more like a decade.

Cedar Falls passed a referendum in 1994 (19 years ago) to implement a municipal telecom network (originally HFC, not FTTP) and started upgrading to FTTP in 2010. On the other hand, Palo Alto City Council in 1985 thought that the City shouldn't be in the telecom business, so it franchised Cable Co-op to build a telecom network (which was all-coax). Later, in 1999, when Cable Co-op offered to sell the network to the City, Council declined. I don't know which community was "smarter," but up to now, Cedar Falls has the better result.

Posted by Wayne Martin
a resident of Another Palo Alto neighborhood
on Nov 3, 2013 at 8:40 pm

> In towns like Palo Alto, which don't have a lot of unused space,
> economic development can mean enabling home businesses and allowing
> people to telecommute.

Although we don't know exactly how many home businesses there are in Palo Alto, there is every reason to believe that there are quite a few. There has never been any evidence that people wanting to work at home have been unable to start businesses because of the lack of adequate telecommunications.

People who need high-speed datacomm could always buy what they need. Claims that datacomm was too expensive have never demonstrated that they couldn't afford the data links, but they could afford all of the other costs of running a home business.

> telecommuting ..

There have been few examples ever offered to demonstrate why the taxpayers should pay 445m-$65M to subsidize the employees of companies that want their employees to telecommute. Those companies can always pay for the datacomm links, if having people working at their homes was seen to be that important.

And then we've got Yahoo--that seems to have recalled all of its employees back to the office, for reasons only known to Yahoo Management.

Posted by Jim Hols
a resident of Community Center
on Nov 4, 2013 at 11:06 am

So, some consultants say that there is not enough interest in High speed Internet in Palo Alto? Virtually all entertainment and information is going to the Internet. Maybe the folks that thought the speed wasn't necessary didn't realize that with gigabit access they could stream an entire movie in minutes rather than hours.

People regularly spend $130/month or more for cellular service. My guess is that a consultant study 5 years ago would have said that no one would spend that for cellular.

But I think that people get too focused on the ultra high speed part.
At my home, the maximum speed I ever got from AT&T DSL was 2.5 mb/s. Now with Uverse I get a measly 5 mb/s. Better. But I pay $46/month for this low speed. I could go with Comcast and perhaps get 15 or 20mbs. But their price after all the misleading intro specials is over $70/month.

If the City, with or without partners could build a network to support medium speed, say 15 mb/s for $50/m then it would either kill AT&T or Comcast offerings or bring some competition to our area.

Sure, there are probably not a lot of businesses and residences that would pay a lot for very high speeds approaching 1 gb/s.

I think a lot of people would pay in the $50 range for medium speed. Now if Palo Alto could even offer a 5 mb/s speed for $30/month, then there should be a wide number of adopters of the service. And many of these would later upgrade to higher speeds.

There's a community in Palo Alto that opposed fiber from day one. Why do you want to pay Comcast $70 for Internet?

I think customers will say no on any survey that implies a large upfront cost. This is why Solar companies now provide solar panels on a lease for free and why Cellular subsidize phones and get it back in monthly fees.

When I said FTTP could "enable" home businesses, I guess I should have spelled out that it could not only make some home businesses possible that would otherwise not be possible but also make some home businesses more profitable than they would otherwise be.

I don't think Wayne is the best judge of what businesses "need." I don't think that a business should have to prove to Wayne that it "needs" better telecom options than it currently has with either the incumbents or with the City's dark fiber network.

In a reader comment here,Web Link
Doug Moran complains that in 2000, he worked for a startup that tried to get a dark fiber connection from the City (presumably because it wanted a dark fiber connection, even though Wayne might say it didn't "need" one), but that it was impossible to deal with the City, so it settled for multiple DSL lines instead. I assume that what made the City "impossible" to deal with was the price. Maybe Doug could say whether that's right. Maybe Doug could say how much better a dark fiber connection would have been for the startup than the DSL lines, had the startup been able to afford it.

I'm not talking about the "taxpayers" subsidizing anything. I think it's possible for Palo Alto to build and operate a citywide municipal fiber network that is paid for entirely by the customers who subscribe to its services.

We all love our smartphones, but they are a costly addiction to support. According toConsumer Reports, American wireless subscribers saw their wireless bills increase by 7% between 2011 and 2012, and the big culprit is the continued proliferation of smartphones. Overall, 70% of wireless subscribers who took part in Consumer Reports' survey owned smartphones this year, up from 50% in 2011. As the publication notes, "upgrading from a plain cell phone at a major carrier isn't cheap" since "you have to buy the smart phone itself (usually $100 to $400 when signing a two-year contract) and fork over $70 to $110 a month for a plan with data service… a lot more than a basic phone plan, which generally costs $40 to $70 a month."

---

With people buying both communications and mobilitythere is no way to reasonably compare a smartphone bill and a high-speed data link bill. If you have car trouble, you can call for help with your mobile phone. Your high-speed link at home just won't provide you any help, no matter how little it costs.

Posted by Wayne Martin
a resident of Fairmeadow
on Nov 4, 2013 at 8:49 pm

> When I said FTTP could "enable" home businesses, I guess I should
> have spelled out that it could not only make some home businesses
>possible that would otherwise not be possible but also make some
> home businesses more profitable than they would otherwise be.

There have never really been any examples of businesses that could only be started by a publicly-subsidized high speed datalink that could no be started by a privately supplied data link.

The argument that the taxpayers have an obligation to subsidize businesses that depend on high-speed data would seem to require a similar subsidy for other businesses, which don't depend so much on data. For instance, what about business trying to pioneer rocket science. Wouldn't they want the City to provide space for rocket launches? Certainly Elon Musk might be interested in that sort of subsidy for his rocket business, wouldn't he.

The arguments are lame, and demonstrate the pipe dreams of someone who probably has not ever started a business.

There are many examples of citywide municipal FTTP networks that are financially successful, and don't rely on being "subsidized" by "taxpayers." I think Palo Alto can build and run such a network. It is well known that the telecom products available from the private-sector providers in Palo Alto are inferior to those available in Chattanooga, Lafayette, and other municipalities that have municipal FTTP networks. Having better telecom options is vital to the community.

Palo Alto's electric, gas, and water utilities are not subsidized by taxpayers. They are paid for by the customers who use the services.

The rocket example is just silly. Who in town needs or is willing to pay for rocket services? Why would the City get involved in providing rocket services?

It is? How come? A lot of people on this thread seem satisfied with current options. I'm satisfied with current options. The vast majority of cities don't have municipal FTTP - why should we care if a few do?

These days, high-speed wired Internet service is so useful for so many things that it is in a community's interest to have the best Internet services possible. If Palo Alto can provide superior Internet services over a citywide municipal FTTP network, which is paid for, in the long run, by the people who subscribe to those services, then I think it should do so.

I don't want the City to decide based only on what the reader comments on this thread have to say. Ideally, the City would give every premises the opportunity to sign up for specific services at specific prices, and then build out FTTP first in those neighborhoods that show the most interest. If someone wanted service in a particular neighborhood, then that person could consider convincing neighbors to sign up.

According to this article, 25.7 million homes in North America were "passed" by fiber as of March 2013. Of these, 22.8 million were "marketed" to, and 9.7 million were "connected." The average take rate ("connected" divided by "marketed") was 42.5%, but for the U.S., average take rate was 44.8%.Web Link
The City's 2003 business plan showed that a FTTP network could be successful financially with a take rate of 33% or even less.

Most of these homes were passed by private-sector companies like Verizon. However, I think municipal is a better option, because a municipal government exists to act in the community's interest, whereas a private-sector company exists to act in the shareholders' interest. And in the United States, regulation is insufficient to make private-sector companies act in the community's interest.

@Jeff Hoel - I understand your point of view. You're a true believer - "it is in a community's interest to have the best Internet services possible." Not sure I agree, but at least I understand where you're coming from.

"Regulation is insufficient to make private-sector companies act in the community's interest" - true, but many would say that it is equally hard to get government to act in the community's interest! I think there is skepticism that public sector investment makes sense where there are well-capitalized private sector incumbents. In theory it could be better, but it often doesn't work out.

The incumbents in Chattanooga are Comcast and AT&T. The incumbents in Lafayette are Cox and AT&T. (When Lafayette started looking into FTTP, the phone incumbent was BellSouth, which was later acquired by AT&T.) The incumbents in Bristol, VA, are Charter and Sprint. So it's possible for a municipality to implement FTTP in competition with well-capitalized private-sector incumbents and be successful.Web Link

Are the folks who talk about its being hard to get "government" to act in the community's interest talking about federal government, state government, county government, or Palo Alto City government? I'm talking about getting Palo Alto City government to act in the community's interest. I've been lobbying Council and UAC on the FTTP issue since 2002. I don't know whether I'll be successful. But I would have had no chance of getting either Comcast or AT&T to do anything in the community's interest.

Some people use the term "true believer" to connote someone who continues to believe in something despite overwhelming evidence to the contrary. I claim not to be that kind of "true believer."

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